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Financial cost differs from Physical cost after transfer order is posted

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Posted on by Cost accountant pdx

Hi,

I am using Microsoft dax 2009 and we are using the weighted average date inventory model. I am having trouble understanding why the financial cost differs from the physical cost in this one instance. We had a transfer journal occur between the same site and warehouse but the location bin was different. The physical cost stayed the same but the financial cost shot up from $42 to $259. I know that the financial cost is adjusted when you do the weighted recalculations but I don't see anything that could have triggered this large of a variance. I checked the settlements on this and it said that there was a $4,367 adjustment increasing the amount settled to $5,195. How can I see where the $4,367 adjustment came from? What receipts were getting settled to what issues?

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guk1964 10,888 on at

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Do you run inventory close monthly ?

Is the include physical value option selected?

are there any postings that are not on logical date order e.g. backdated

see the white paper for some explanatory examples http://download.microsoft.com/download/F/B/1/FB1DE69D-449C-4FA8-A726-49CA9B96247D/MicrosoftDynamicsAX2009CostManagementWhitePaper.pdf

also see https://www.microsoft.com/en-us/download/details.aspx?id=12174 Microsoft Dynamics AX 2009 White Paper: Close Non-Financial Transfers

In the Closing and adjustment form, click the Settlements button to open the Settlements for voucher form.

Select a transaction on the Overview tab.

Click the Transaction button to open the Settlements in the transaction form, where you can view the settled transaction and identify which issue was settled to which receipt.

Inventory management > Periodic > Closing and adjustment > Close procedure > Check open quantities.– Opens the Check open quantities form to print a report.

This report lists the items that will not be fully settled after running the inventory closing on the specified date which are often the cause of suspect costs.

An old post that may help https://community.dynamics.com/ax/b/sanamkhan/posts/inventory-closing-in-ax-2009-part-ii

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Cost accountant pdx 30 on at

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Thank you for responding. Yes I run close monthly as well as a weekly recalculation. Our inventory model has the physical value option selected and there are no dates backdated. I ran the settlement transactions and can see what receipts the weighted average calc settled its issues on. But the PO listed below has a qty of 18 and the PO was only for 16 there are no transactions that show 18 came from that PO? I also see on the transfer the $5,194 amount that triggered the high financial cost but where can I see where that number came from?

I also have a question that hopefully you can help me with on a manufactured item. This item was going steady at $4.78 and then on 4/24 the cost shot up to $5.51 when it was getting consumed on a production line. There are no high dollar receipts that should have triggered this cost to drive up? We haven't recently changed the cost on this item and the inventory transaction receipts are lower than the cost that it is getting consumed at so the weighted average shouldn't be going higher?

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Guy Terry 28,924 Moderator on at

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Hi

Which lines on your item's Storage dimension group have both Active and Financial inventory ticked?

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Cost accountant pdx 30 on at

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Only site has both active and financial checked as well as physical

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Guy Terry 28,924 Moderator on at

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Hmm. Ok. That doesn't help explain anything then!

I'm not sure how to read the screens magic has asked for. When I see an unexpectedly high cost price on an issue transaction, I normally put it down to what AX calls price amplification (Google it; you'll find it on the official help site). Essentially, it can happen when AX has to value a greater quantity of issues than it has valued receipts. It's quite easy to get this if you are allowing negative stock, or if Include physical value is not ticked, but it's still possible even if you have taken both those precautions. (Essentially, if you use the Registration function to receive items, you are receiving a quantity for which, until you post the receipt, AX has no cost). As you say, the true actual cost price assigned to the issue transaction is the Financial cost amount plus the Adjustment. Assuming you continue to receive and invoice your purchase orders, close your transfer orders and run inventory close, I am sure AX will sort it out eventually. (Of course, you might create new examples in the mean time, which in turn get sorted out later. And so on).

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Ludwig Reinhard Microsoft Employee on at

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Good morning cost accountant pdx,

Just wondering if you have been able to get your issue resolved/ question answered.

Would be great if you could keep us updated.

Best regards,

Ludwig

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